How does BWC calculate my premium rates?

Simply put, the cost of workers’ compensation coverage is reflective of the cost of workers’ compensation claims. Your premiums cover the payment of compensation and medical costs related to industrial accidents and diseases that occur during your experience period.

• Experience period - the time period used for rate making. It is the oldest four of the five years preceding the effective date of the rates. BWC excludes claims incurred during the most recent year because these claims have not had sufficient time to develop payment patterns.
• Reserve - a prediction of the future cost of the claim based on the total cost of similar claims filed in the past. BWC assigns a reserve to each lost-time claim, claims filed when the employee has lost eight or more days of work as a result of the injury or disease.
• Base rate calculations begin with grouping industries according to the accident risk of their operations.
• BWC then determines the total cost of claims in each industry classification, using Ohio claims experience only.
• BWC totals the payroll in each industry classification.
• Using payroll and claims losses: BWC determines a base rate.
• BWC bases the amount of premium you pay on your industry classification rate assessed per $100 of reportable payroll.
• In addition to the costs of claims, the base rate includes an assessment for the Division of Safety & Hygiene.
• You also pay assessments for the Disabled Workers Relief Fund and administrative costs for the operation of BWC and the Industrial Commission of Ohio.